A Company Has a Net Cash Inflow from Operating Activities

question 20

Multiple Choice

A company has a net cash inflow from operating activities of $789,000, a net cash outflow of $50,000 from investing activities and a net cash inflow of $100,000 from financing activities. The company paid $124,000 in interest, $186,500 in income taxes, and $200,000 in dividends. Which of the following statements about the Statement of Cash Flows is NOT true:

• A) Dividends of $200,000 will be reported as a cash outflow in the cash flow from investing activities section.
• B) Supplemental disclosures required for a company using the indirect method include the amount of interest and the amount of income taxes paid.
• C) The Statement of Cash Flows will show a net increase to cash and cash equivalents of $839,000.
• D) If the direct method is used, the $124,000 of interest paid and the $186,500 of income taxes paid will be reported in the cash flows from operating activities.

Understand the definition and reporting of government organization control and controlled entities.

Recognize the methods used for impairment testing of tangible capital assets in government entities.

Differentiate between exchange and non-exchange transactions in the context of government transfers.

Identify the basis of presenting the statement of cash flows for government entities.

---

Definitions:

Hemoglobin

A molecule found in red blood cells that carries oxygen from the lungs to all parts of the body.

Bilateral Symmetry

A body plan in which organisms have body shapes that are mirror images along a midline called the sagittal plane.

Water Vascular System

A network of water-filled canals in echinoderms, like starfish, used for locomotion, feeding, and gas exchange.

Tube Feet

Structures characteristic of echinoderms; function in locomotion and feeding.